Opinion: AMD roadmap change benefits TSMC?

AMD's roadmap is about to see some significant changes according to sources at the company.

MOUNTAIN VIEW, Calif.--Advanced Micro Devices Inc.'s (AMD) roadmap is about to see some significant changes according to sources at the company.

With online reports suggesting AMD could scrap its 28-nm APU production at Globalfoundries in order to move the manufacturing to TSMC, EE Times has confirmed with sources at the firm that roadmap changes are “imminent” and that “28-nm schedules aren’t what we wanted.” Whether those changes pertain to a switch of manufacturing partners, however, has yet to be fully substantiated.

“We will have a roadmap update in the very near term,” said a source at AMD though he stressed that the firm had always kept its manufacturing options open.

“We did not get specific about our manufacturing partner for 28-nm APUs for 2012, we have always said that both GlobalFoundries and TSMC are strong manufacturing partners and we reserve rights to keep our options open,” he said. All of AMD’s 28-nm discrete GPUs are already being made at TSMC.

Another source at the company told EETimes he was not surprised to hear the murmurs of manufacturing changes surface, but said any public announcements about such a change in the roadmap would be considered highly sensitive and would likely be broken to financial analysts first.

EETimes has discovered that several analysts have been invited to a recently scheduled meeting on Dec. 5th.

“Changes are coming,” said In-Stat’s Jim McGregor, saying a change in manufacturing partners would not surprise him in the slightest, especially with relationships between Globalfoundries and AMD growing increasingly strained.

“AMD has had so many problems with Globalfoundries this year, from low yields to low ramps and high cost,” he said adding, “The relationship between the two does not seem to be providing benefit to either company at the moment.”

An agreement which expires on January 1, has meant that AMD only pays Globalfoundries for viable 32-nm dies, which has a financial loss for Globalfoundries based on the difficulties it has had achieving high yields. After January 1, AMD would have to go back to paying for every wafer, successful or not, something the firm may not be very keen to do.

McGregor said that should the 28-nm Globalfoundries made APUs really be scrapped, it would cause a “world of hurt” for AMD, which would be left a generation behind its competition for most of 2012, making AMD even less significant in the market.

AMD sources, however, were quick to defend the firm’s chances, even in the case 28-nm should change course over the coming weeks.

“Even if we were forced to stick with 40nm Brazos, it would not be the end of the world,” an AMD insider told us. The firm feels it has a successful product with Brazos, which is aimed at the $299-$400 notebook market. 20 million have shipped so far through Q3.

“We’ll be ok because of the price point Brazos is currently at in the market,” said the AMD insider, adding that the firm was a lot more optimistic about its upcoming Trinity products, which are the next generation to the 32-nm Bulldozer-based Llano.

“Trinity is in good shape,” he said, though some believe the firm may have trouble matching Llano’s performance-per-watt ratio and would leave a gaping hole in AMD’s ultra-low power product line at a time when tablets and lower powered notebooks are all the rage.

Meanwhile, Globalfoundries said it would not comment on its customer's foundry selection process or on their products unless they did so first. The spokesman also said problems with Llano had been specific to that product and that yields for AMD's 32/28nm Bulldozer products were on target and not affecting AMD's ability to meet customer commitments.

“We are still the only foundry producing HKMG products that can be purchased in stores now,” the Globalfoundries spokesman said, noting that the fab expected to ship “far more” HKMG volume in 2011 than all other foundries combined.

“In a recent call with financial analysts, AMD confirmed that the Llano ramp has essentially matched the Brazos ramp at TSMC. Given that Brazos is a very small die on the mature 40nm node process, this is a significant achievement. Llano is a much larger die, far more complex, and it is on 32nm with HKMG,” he said.

If AMD were to change manufacturing partners for its 28-nm APUs, it could take up to 18 months for chips similar to the planned --but failed-- Krishna/Wichita designs.

An official AMD Financial Analyst Day is to be held in February, with more updates and roadmap changes scheduled for that time frame, but in the meanwhile, we can expect public changes to be announced in December.

@daleste: thank you for raising a voice of reason!
One report from the PCPER.com website says TSMC's revenue from 28nm process is going to be approximately 10% in 2012 and way less in 2011!
http://pcper.com/category/tags/28nm
This makes me wonder, what exactly is the yield range for TSMC's HKMG Gate last process?
MP Divakar

Hope you will read this answer, Divakar! It is not so much about yields. It is about ramping. q4/11 will see 2% revenue share of 28nm at TSMC followed by 10% in q1/12 according to TSMC. Glofo is even behind that on 28 nm, but already shipping millions of Llanos with even more sophisticated SOI-Technology in 32 nm which is very likely even superior to TSMC bulk process. So it is not that TSMC and Glofo are bad. There is no other foundry that can do this. But there is Intel and nobody can really compete with them.